News 09th Dec 2020

Corruption and its deadly role in conflict and instability – why we mustn’t give up the fight

Daniel Bruce

Chief Executive

Daniel joined Transparency International UK as Chief Executive in October 2019. He is an experienced senior leader in international charities, previously serving as Chief Executive of the press freedom and media development organisation Internews.

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What do the following events have in common?

The devastating war in Yemen which has claimed (so far) an estimated 100,000 lives; the recent protests in Nigeria which ended in violence; the explosion of a port warehouse in Lebanon’s capital Beirut in August which killed nearly 200 people, injured 6,500 and uprooted more than 300,000.

The answer is, of course, corruption.

As my colleague in Yemen, Saif Al Hadi observed, “people didn’t trust the government, it was too corrupt, and they didn’t believe that the security forces were there to protect them”.

The ‘EndSARS’ protests in Nigeria were similarly fueled by anger at the government’s use of the dreaded Special Anti-Robbery Squad, notorious for extra-judicial killings, torture and extortion. And, in Lebanon, the widely accepted view is that negligence and corruption contributed to the explosion. Even the Prime Minister who resigned two days later acknowledged that corruption was “bigger than the state”. 

These examples are more evidence that corruption, instability and conflict are closely linked. 

Respected former US military leaders Generals Stanley McChrystal and David Petraeus explicitly blame corruption for prolonging the wars in Iraq and Afghanistan, two of the longest and bloodiest conflicts in the 21st century.

It should be no surprise.  After all abuse of power and public funds perpetuates poverty and injustice. It wastes government money and weakens institutions critical to providing vital health, welfare, and other services, leading to inequality. Grievances and resentment fester when individuals and narrow interest groups extract public money and shape state decisions. 

This disillusionment and distrust can easily tip over into civil unrest.  The 2010 Arab Spring brought out tens of thousands across the Middle East in protests and uprisings at corrupt and oppressive governments and high levels of poverty.

That resentment and frustration also creates fertile ground for extremist groups and organised crime waiting in the wings. Just think of Isis in Syria and Iraq and the Taliban in Afghanistan whose recruits included those disgusted with their country’s rotten leadership,

Furthermore, when the army, police and other defence and security institutions are damaged by corruption they become incapable of responding effectively and fail to protect the public. For example, in Nigeria the government notably dismissed warnings about the threat from Boko Haram.

 

Corruption and Coronavirus

Disturbingly, we have also seen how crises like the Coronavirus pandemic have facilitated power grabs, limiting freedom of information and speech, often without a clear end date.

In Myanmar, the government set up a special task force to prosecute anyone spreading “misinformation”. Thousands of websites have been blocked, many of which are legitimate news outlets representing marginalised communities.

In Pakistan, the country’s military unilaterally enforced a lockdown resulting in a crackdown on dissent and freedom of the press. Prominent journalists who have spoken out about the military have been detained and threatened.

 

Exporting Corruption, welcoming Dirty Money

Globally, the apparent lack of concern about corruption is painfully apparent in Transparency International’s recent Exporting Corruption 2020 report. It revealed that only Britain and three other countries out of the world’s biggest exporters actively investigate and punish companies paying bribes abroad.

While it is great to see Britain in the top cohort, it is worth noting that the UK came within a whisker of being downgraded. Yet prosecuting bribery is essential to maintain a level playing field for law abiding British businesses approaching new international markets. If not, more and more will follow the lead of those seen to be getting away with it, leading to more inequality and resentment.

The notoriously secretive global arms trade has benefitted hugely from the lack of checks on corruption with potential for the deadliest consequences.

Eight of the world’s ten largest importers of major arms from 2015 to 2019, are at high risk of corruption according to our Government Defence Index.

Quite simply, that means major arms are being sold to people and countries where they are likely to fuel corruption, and where oversight and accountability is virtually non-existent. The potential to trigger instability and conflict is huge.

If Britain is to play a serious role in reducing corruption and consequently global instability, we must also send a clear message that dirty money is no longer welcome here. That means an end to UK services helping to launder and embed it into the UK economy, and that there are stiff penalties for all those involved.

While there are other destinations for the corrupt, Britain is a clear favourite. Making it harder for these individuals to stash their money here will serve to both deprive them of their ill-gotten funds and make it less attractive to steal from their country in the first place.

That is why we have long advocated for public registers of the true owners of overseas companies holding UK property.

It is true that the British Overseas Territories – even the British Virgin Islands, notorious as a safe haven for dirty money - have all recently committed to creating public registers of company ownership – but not until 2023. Until these are in place, the corrupt will continue to use the veil of secrecy which companies registered in these jurisdictions provide.

 

UK leadership on corruption in 2021

The UK can and should use its voice at key economic events to put fighting corruption on the agenda.

Next year, for instance, the UK is due to host the G7. With little sign of global leadership on the fight against corruption (although that may change with Joe Biden’s ascent to the US Presidency), there is a clear opportunity for the UK and others to lead the way on calls to clampdown on illicit finance  - an issue which is closely linked not just to corruption but to organised crime, the drugs trade, terrorist financing and sanctions busting.

Similarly, when it comes to negotiating free trade deals in the wake of Brexit, the UK (and other countries), have leverage to demand trading partners level the playing field for law-abiding businesses by prosecuting the corrupt.

If and when plans for President-Elect Biden’s ‘Summit for Democracy’ are confirmed, then the UK should welcome the opportunity to proactively support and join renewed global leadership in the battle against corruption and the dirty money of kleptocracies.

There is no question this is an uphill battle, and the disruption caused by the COVID-19 pandemic will undoubtedly have made this task even harder. But 2021 is the time for the UK to step up and address Britain’s role in facilitating the corruption that fuels so much insecurity and conflict around the world.